Tds

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

08 March 2015 Dear expert.
i am service provider of security service. i have raised the bill rs. 100000+3090 ST on 25%, in under reverse charges,

but the service recipient has deducted the 2% tds on total amount 103090/-

plz. tell me. is it correct to deduct the tds on the service tax amount also which cover under reverse charges.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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08 March 2015 It is not correct to deduct TDS on service tax amount.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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08 March 2015 It is not correct.

TDS to be deducted on amount excluding service tax for all sections. The CBDT has issued Circular No. 1/2014 dated 13.01.2014 pointing out that the Rajasthan High Court has taken the view in CIT(TDS) vs. Rajashthan Urban Infrastructure that if as per the terms of the agreement between the payer and the payee, the amount of service-tax is to be paid separately and was not included in the fees for professional services or technical services, no TDS is required to be made on the service-tax component u/s 194J of the Act. Pursuant thereto, the CBDT has decided in exercise of powers u/s 119 that wherever the terms of the agreement/ contract between the payer and the payee, the service tax component comprised in the amount is indicated separately, tax shall be deducted at source under Chapter XVII-B of the Act on the amount paid/payable without including such service tax component. Complete notification may be seen from below link-- https://law.incometaxindia.gov.in/DIT/Circulars.aspx

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